The average house price could surpass the £300,000 threshold this year, as market sentiment is buoyed by an increasing number of buyers, research from West One Loans has revealed.
West One Loans analysed the current and historical trajectory of UK house prices on a seasonally adjusted basis, and how they are expected to perform over the year ahead.
2024 was a year of far greater stability with respect to the property market, with Bank of England data showing that monthly mortgage approvals have sat north of the 60,000 per month threshold since February of last year.
With buyers returning to the market, the average house price was found to be 3.3% higher than the same time last year.
Moreover, West One’s analysis of current and historical Government data, seasonally adjusted to account for seasonal market fluctuations throughout the year, estimated that the average house price could climb by 3.5% to 3.9% over the course of 2025.
Should the market meet this expectation, it would see the average house price tip the £300,000 threshold to hit £303,913.
West One Loans said it has already seen a significant uptick in activity across the short-term lending space so far in 2025, as developers have looked to hit the ground running ahead of what is expected to be another year of property market positivity.
Thomas Cantor, co-head of short-term finance at West One Loans, said: “The outlook for the year ahead is that the market will continue to improve from the ground made in 2024 and we’ve already seen a strong start to the year from those looking to utilise specialist lenders in order to capitalise on the growing opportunities that are emerging due to current market momentum.
“Many of those now utilising specialist lending are clients who have been dormant for the last couple of years and this inactivity has largely been down to the slower pace of the new-build market.
“We’ve seen a slowdown with respect to demand for new-build homes and this has meant that developers have seen a great deal of equity tied up in existing developments, which has prevented them from pushing forward on their next project.”
He added: “However, this tide is certainly starting to turn and, with the expectation of a more buoyancy market over the next 12 months, we’re now seeing these clients turn their focus to their next project and look to specialist lending to help get the ball rolling.
“Our ability to allow developers to utilise specialist lending during multiple stages of the journey has been vital in the current market and we’re also seeing clients value the speed of delivery with respect to this finance, as it allows them to remain agile and capitalise on opportunities in a market where demand is increasing by the day.”
